The drop in shares of Petroleo Brasileiro SA, the Brazilian state-owned oil company, which wiped out approximately $11 billion in value in a single trading session, proved advantageous for a hedge fund manager based in Rio de Janeiro.
Vista Capital, the fund manager, saw its flagship fund surge by 2.3% net of fees on Friday, outperforming all 154 peers tracked by Bloomberg. This boost helped mitigate the fund’s year-to-date losses by the end of last week, largely due to a bearish bet against Petrobras, which served as a hedge for its exposure to Brazilian equities.
Petrobras experienced a sharp decline of over 10%, marking its worst trading day in more than a year. This downturn came as traders grew apprehensive about heightened political interference in the company, especially following its decision to forgo a special dividend payment amidst pressure from President Luiz Inacio Lula da Silva.
Commenting on the situation, Vista noted in an investor note earlier in the week that the government’s move to suspend extraordinary dividends seemed to carry more symbolic weight than direct financial impact. The firm suggested that Petrobras, being state-controlled, could potentially be utilized as a significant tool for the Lula administration’s policy objectives.
Vista Capital, founded in 2014 by Joao Landau and Joao Lopes, manages assets exceeding 4 billion reais ($800 million) according to its website. However, despite its recent success with the Petrobras downturn, its hedge fund remains down 2.4% year-to-date, as per data compiled by Bloomberg.
It’s worth noting that the data provided encompass only multimarket funds with assets exceeding 500 million reais, excluding those with fewer than 100 shareholders. As of now, Vista Capital has not responded to requests for further comment.
